Psych ops give Moore the edge

Illustration: Rod Clement

There’s plenty of interest in Virgin Australia, so private equiteer Ben Gray ’s BGH Capital might not have a rails run in the race to rescue the failed airline.

But if millionaire former Macquarie boss Nicholas Moore is seeking insights into how business is done at Gray’s Melbourne-based PE shop, he won’t have to look far.

The almost 62-year-old retired bank boss’s daughter, Lydia Moss,appears to be something of a chip off the old block, also choosing the world of finance to carve out her career.

The 31-year-old has worked as an associate at Gray’s 101 Collins Street outfit since late 2017, leaving only very recently (we note the young Moore still appears on company filings) in favour of getting hitched to a farmer in Tassie.

Coincidently, Gray’s father, Robin Gray, now 80, was a former Liberal premier of the Apple Isle and recently released a book on his time in power during the 1980s.

Before BGH the young Moore spent five years at PwC.

While running the Millionaires Factory, Moore oversaw extensive psychological testing of all his staff at the investment bank, likely including Ben Gray’s founding co-partner Robin Bishop — the B in BGH.

That means Treasurer Josh Frydenberg ’s hand-picked eyes and ears in the Deloitte-led sale process knows the likes of Bishop, who ran Macquarie Capital, and his type inside out, back to front.

With that sort of insight, Frydenberg will be hoping the Virgin process yields no surprises.

Noses out of joint

Deloitte’s appointment as voluntary administrators of Virgin Australia likely upset the KordaMentha liquidation team who were ready to have a shot at saving the airline.

Mark Korda and Mark Mentha, the firm’s co-founders, were overlooked for the historic restructuring having spent many years of their professional lives seeking to save Ansett.

There’s even speculation Deloitte could be rolled at the first meeting of creditors on April 30.

Mentha has strong links to key trade union figures, and not that it matters, the Labor Party. Indeed Margin Call gathers Mentha threw Bill Shorten the keys to his Portsea weekender for the then-defeated Labor leader to recuperate from his election loss last May.

Any chance of replacing Deloitte’s awesome foursome would start with questions around independence fuelled by Deloitte’s involvement with Virgin pre-appointment.

It emerged Deloitte accountants have had their heads under the hood of the Richard Branson-founded airline long before its appointment.

Their 14-page declaration of the relevant relationships of Vaughan Strawbridge, Richard Hughes, John Greig and Sal Algeri discloses that they were engaged on April 5/6 by Clayton Utz, Virgin’s legal advisers, for which they are to be paid $200,000.

Strawbridge attended the Virgin board meetings held last Sunday and Monday, where he was asked “to explain to the directors the nature and consequences of an insolvency appointment”.

Deloitte has previously provided Virgin staff wellbeing and tax advice. And there’s Deloitte’s involvement over the past two years with frequent flyer issues.

Deloitte advised Virgin on taxation matters in respect of the sale of Affinity Equity Partners’ stake in Velocity and the mooted IPO.

Strawbridge, Hughes, Greig and Algeri are all members of the Velocity Frequent Flyer program, not that that would be sufficient to disqualify them.

Their points are presumably as worthless as anyone’s.

Island in the stream

Cash-strapped entrepreneur Sir Richard Branson has seemingly forgotten there’s a Sunshine Coast island that sits in his castaway island portfolio.

He’s gone public saying he will offer up Necker Island, in the British Virgin Islands, as collateral after his unsuccessful pleas for government bailouts. But no word on his own Makepeace Island at Noosa, currently losing around $30,000 a week due to its COVID-19 closure.

Makepeace Island is not part of the Elizabeth Bryan-chaired Virgin Australia assets.

The private Noosa holiday resort was developed by Branson alongside his Virgin Australia co-founder Brett Godfrey and former colleague Rob Sherrard, who bought the heart-shaped island for $2.86m in 2003 from artist Brian Spencer. Sherrard subsequently quit and two years ago, Melbourne billionaire Radek Sali joined the ownership syndicate.

Having bought a derelict Queenslander with roofing, more than $7m has been spent through the years including the 2018 renovation by Branson’s go-to interior designer June Robinson Scott, who worked on Necker Island and Branson’s other lesser-known nearby island, Moskito Island.

Makepeace now has a main house, three two-bedroom villas and a four-bedroom guesthouse. It has a boathouse, lagoon pool and a 15-person spa, outdoor cinema and a tennis court.

When he bought Makepeace Island Bransonexuberantly advised it would be available for Virgin staff free of charge.

“It’s incredible when you think of the achievement that all of the staff have done down here — airfares have halved and hundreds and thousands of more people are travelling,” he said.

“None of that could have been possible had it not been for our magnificent staff.

“As a thank you, we have bought a beautiful island off Noosa for the staff to use with their friends to come and party,” Branson said when he bought the island some 17 years ago.

Branson opened his island retreat for the well-heeled in 2011, four years after Sherrard had departed the consortium.

It costs $10,000 for two nights, including three meals a day by the executive chef Lisa Maher.

Peak season costs $18,000 for two nights to book the island.

Pop star Justin Bieber and US rapper will.i.am have enjoyed stays.

“Makepeace Island is my home when I come to Australia,’’ Branson told travel writer Angela Saurine a few years ago.

His stake is held via the Virgin Islands based company Brela Holdings.

It was a muddy 9ha subtropical patch of land in the Noosa River, 6km upstream from the coast, near Tewantin, when it was bought.

Long known as Pig Island, given the nearby Sheep and Goat islands, it was renamed after a spinster housekeeper, Hannah Makepeace, who started to work there in 1924 and later inherited the house.

She would fire her weapon in the air to alert neighbours that she needed groceries rowed out to her.

The island is on a long lease from the Queensland government, so premier Anastasia Palaszczuk holds the cards on its ultimate future.

Cutting some slack

If he’s not careful banker Matt Comyn is going to get a market reputation as a corporate good guy.

Margin Call understands the $150bn Commonwealth Bank is owed in the order of $20m to $30m by Virgin Australia. But aviation industry sources tell us Australia’s largest financial institution is taking a pragmatic approach as a creditor of the Paul Scurrah-led airline.

Virgin’s debt to CBA is believed to be secured against two of the failed airline’s aircraft, one flying under the Virgin brand and the other a Tiger plane.

The bank is believed to have been a secured lender since 2014.

Before Virgin was officially placed into administration on Tuesday, we hear that CBA offered to defer loan repayments for three months to give management some breathing room as they sought to keep the enterprise afloat. We now hear that that offer has also been extended to Virgin’s administrators towards getting Australia’s second airline back in the air.

Virgin’s principal banker is the now Peter King-led Westpac, which is expected to be owed a sum much greater than that of CBA.

Booze fest

The Virgin collapse is Comyn’s second association with a high-profile corporate collapse this year. CBA was the key lender to celebrity chef George Calombaris and millionaire entrepreneur Radek Sali’s failed restaurant and hospitality empire, MAdE Establishment, which is now being liquidated by KordaMentha.

The impressive cellar of that spectacular collapse heads to online auction.

Estimated to be worth about $500,000, its been listed by the auction house Hymans.

Ian Hyman says headlining the offeri is a 4.5lt jeroboam (around six standard size bottles) of the Chateau Mouton Rothschild 2000, pegged at between $15,000 and $20,000.

There’s a couple of Pinot’s from the Mornington Peninsula’s Paradigm Hill on the list. All up, the 8000 bottles of super premium wine, spirits, beer and cider are to be flogged, enough to drown anyone’s financial failure sorrows.